How much is your piece of paradise worth? When you need to find out the value of your home – for a family estate, for a bank to offer a mortgage, for a divorcing couple to figure out their assets, or for a property owner to contest taxes – you get the services of an appraiser. This is the person who will take a good look at the condition, renovations and surroundings of the property, and give it a dollar value.

John Kenneythe Gazette

andy Dodge is busy now doing appraisals for property tax purposes, but these professionals are also important for estates, mortgage applications and in many other areas.“I worry about the value of the house on the market,” says Andy Dodge of Andy Dodge and Associates, who has been doing appraisals since 1982, “and right now property tax appraisals are taking up all my time.”

The most important rooms to evaluate are kitchen and bathroom, Dodge says, and the age of improvements. “If you go into a kitchen and find an old sink with washboard and a plug-in stove, you know that the kitchen is not going to sell very well,” he says, “compared to a kitchen with a Sub-Zero fridge, the latest appliances and huge cabinets. Or if you look in a bathroom and the sink has rust stains, compared to bathrooms with whirlpools and steam showers and double sinks.”

The renovations affect the value, Dodge says, as do the age of windows, furnaces – the overall condition of the home.

And while it’s true that people can put in a new toilet without renovating, or you have to guess whether the fireplace works, there are usually telltale dates on furnaces and toilets, so a good appraiser knows the age.But sometimes, even old has value.

While new windows have advanced technology that makes them airtight, some of the old classic style – leaded windows, ornate woodwork and gingerbread – can increase the value of a home.

The construction of the house is also a factor. In central Montreal, where he does most of his appraisals, there is virtually no wood construction since the Montreal fire of 1852 that destroyed almost half the buildings in the city.

But some old houses have settled on what might have once been swampy ground, so one of his tools, Dodge says, is a marble. “You can put it on one side of the room and see if it rolls. This does affect the value; it’s not very comfortable to live in a house that slants.”

Location also matters. There are clearly some locations where the value is higher, Dodge says, and it’s not realistic to do major renovations in a house that will never sell for a high value.

Because value is what appraisals are about – an appraisal is by definition the most likely price that a willing buyer and willing seller would agree to in an open market. “That’s what our expertise is supposed to tell you.”

A huge factor in the appraisal of a property is the demand in the marketplace, says Dodge, who is certified by the Appraisal Institute of Canada.

“There are all kinds of reasons why prices have gone up – buyers and realtors are more sophisticated, there’s more demand and there’s the influence of the overall market.

“Watching the real estate market is the same as watching the stock market,” he says. “The Dow Jones is never going to go back to where it was in 1975 and the real estate market won’t either.”

He believes that another major influence in the value of housing are the baby boomers, who began buying and renovating houses in the 1970s when they started to have families. “There was a huge increase in prices between 1970 and 1980, then a dip because interest rates were so high.”

Political turmoil in Quebec also caused the market to drop, he says, until 1998.

“It has just been climbing ever since, except 2009 when the market fell apart.”

The real estate market follows the stock market, Dodge says, and he offers a monthly real estate analysis in his area of expertise, Westmount, complete with a chart that tracks the rise of home prices over the years. “I have to reflect those trends too, to know what’s happening (andydodgeassociates. com).

“I have developed this system for keeping track of the theoretical price of the average house in Westmount, which is the ratio of price devaluation times the average valuation. That tells me what the average home would sell for,” he says. He has seen this climb first hand – he recently appraised a mansion worth $6 to $7 million today that would have been valued in the 1970s at $250,000.

In the final analysis, an evaluation is basically an estimate, Dodge says. “There’s nothing hard and fast. We try to use the best of our ability and knowledge of what the market has to offer

Make sure you can afford your dwelling since interest rates set to rise, says Kinsley

In 1981, Karen Kinsley was fresh out of university and thought she was a pretty tough negotiator after sealing a mortgage on a two-bedroom condo in Ottawa’s east end.

“I negotiated a vendor takeback mortgage and then negotiated a one-percent discount on the rate. I thought I got a great deal at 21 per cent,” says the University of Ottawa Commerce grad, who has risen up through the ranks at Canada Mortgage and Housing Corp. and recently signed on for a second term as president and CEO of the crown corporation that oversees financing, new design and research initiatives to promote housing across the country.

“I was in my 20s and thought the condo was a palace,” says Kinsley, who has been named one of Canada’s most powerful women for the past three years by the Financial Post Magazine and Ottawa’s top CEO by the Ottawa Business Journal in 2009.

CMHC was also named one of the National Capital Region’s top employers by MediaCorp, a Toronto-based publishing company which collects data on employee benefits.

She calls herself a perfectionist who has a habit of dribbling a bit when sipping water or coffee. Two traits that help explain her dedication to the industry and an impish nature that bubbles up during a wideranging interview.

“I probably paid $80,000. It was 1,200 square feet, open concept and absolutely perfect for a young person,” says Kinsley, who stayed in her St. Laurent Boulevard palace for about three years before leaving for Toronto and a senior financial job with Bill Teron and his international development company.

The job and Teron changed her life, planting the seeds that have grown into her passion for the housing and development industry and a career that has her at the head of a complex organization with 2,100 employees at 700 Montreal Rd.

Just as Teron was returning to the private sector after his own stint as president of CMHC in the late ’80s, Kinsley was offered a six-month contract with CMHC in Ottawa. “I said, ‘Great. Something short term and maybe a bit of a break from the pace of working for the private sector.’

“I was wrong on both counts. Twenty years later, I am here and I never did get a break. I have to tell you, I have never regretted a day. It has never been boring and there is always a challenge or two.

“It’s a passion for me,” says Kinsley, who says her enthusiasm for the real estate sector has broadened through her career at CMHC.

Yet her concern for fiscal control and prudent buying has never varied, even as mortgage rates rise and dip.

“It doesn’t matter if mortgage rates are 21 per cent or three per cent. The bottom line is you’ve got to make sure you can afford what are getting into,” Kinsley says.

Real estate broker Joan McGuigan (left) accepts a book donation for the McGill University Book Fair from Holly Jonas on April 8. McGuigan Pepin Realty, located at 4431 St. Catherine near Kensington, is the new Westmount drop-off for event. Hours are Monday to Friday, 10 am to 4 pm, but would-be givers are advised to call first: 514.937.9393 or 514.846.0846.

Many of you should be aware that the fixed rates have gone up, specifically the 5 year rates. The variable remains unchanged.

As rates continue to rise, it is even more important to have your clients pre-approved. I know many of you like to deal with the banks, however if the ratios do not fit that bank you are going to refer them to, what is your plan B and do you have enough time to achieve it? Let a broker do the shopping for you to avoid lost time.

The Bank of Canada is meeting tomorrow to discuss the prime rate. Updates will be sent out accordingly.